Citigroup, Inc.

Hello, and welcome to Citi's second quarter 2025 earnings call. Today's call will be hosted by Jen Landis, head of Citi Investor Relations. We ask that you please hold all questions until the completion of formal remarks, at which time you'll be given instructions for the question and answer session. Also, as a reminder, this conference is being recorded today. If you have any objections, please disconnect at this time. Ms. Landis, you may begin.

Thank you, Operator. Good morning, and thank you all for joining our second quarter 2025 earnings call. I'm joined today by our Chief Executive Officer, Jane Fraser, and our Chief Financial Officer, Mark Mason. I'd like to remind you that today's presentation, which is available for download on our website, citygroup.com, may contain forward-looking statements which are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these statements due to a variety of factors, including those described in our earnings materials as well as in our SEC filing. And with that, I'll turn it over to Jane. Thank you, Jen, and a very good morning to everyone.

This morning, we reported another very good quarter with net income of $4 billion and earnings per share of $1.96, with an ROTCE of 8.7%. Revenues were up 8% and three of our five businesses had record second quarter revenues. We again had positive operating leverage at each business and the group level. We continue to demonstrate that our strong performance is sustainable through different environments. In April, I'd said that we were ready to lean in despite the lack of clarity of the moment, And indeed, we have. We are executing our strategy with discipline and intensity. We're improving the performance and returns of each of our businesses whilst advancing their strategic positions and share. And we are making significant progress on our transformation. Turning to our five businesses. Services continues to show why this high-returning business, with 23% ROTCE for the quarter, is our crown jewel. Revenue is up 8%, with robust growth in both loans and deposits. Underlying fee drivers, such as cross-border activity and U.S. dollar clearing, grew nicely, and we grew our AUCA to over $28 trillion. Markets revenues were up 16%, the best second quarter since 2020. In fixed income, the flows we saw in rates and currencies were particularly strong, backed by client momentum, including hedging activity, as well as improved monetization. Equities had the best second quarter ever, as our prime balances hit a record. with sentiment improving significantly as the quarter progressed. Banking revenues were up 18%. We continue to be at the center of some of the most significant transactions, including serving as the exclusive advisor to Boeing on the $11 billion sale of Jefferson and as lead advisor to Nippon Steel on their $15 billion acquisition of U.S. Steel. Halfway through the year, We have been involved in seven of the top 10 investment banking fee events. In addition to sustained momentum in M&A, we continue to take share in leverage finance and with sponsors, a priority area. We also took share in equity capital markets with convertibles fueling a strong quarter. Wealth delivered a pre-tax margin of 29%. as revenues were up 20%, with each line of business growing significantly, and non-interest revenue up 17%. Whilst we have had 9% organic growth over the last year in net new investment assets, we did see inflows slow this quarter, as clients were cautious amid macro uncertainty. We are confident we will see a pick-up here as markets have recovered. In USPB, we grew revenues by 6% as we continue to focus on product innovation, digital capabilities, and the customer experience. We saw significant growth in branded cards, whilst retail services was pressured by lower sales activity at our partners. And we continue to feel good about the quality and the mix of our portfolio, as well as our healthy level of reserves. And retail banking had a very good quarter, underpinned by improving deposit spreads. During the quarter, we returned over $3 billion in capital to our common shareholders, which includes $2 billion in share repurchases. On a year-to-date basis, we repurchased $3.75 billion of shares as part of our $20 billion repurchase plan. We ended the quarter at a common equity tier one capital ratio of 13.5%, 140 bits above our current regulatory requirement. We were pleased with the results of our recent stress test. We are well positioned to continue to increase the return of capital to our shareholders through buybacks, which is a priority for us. as well as an increased dividend of 60 cents per share beginning in the third quarter. The results of the recent stress test also show how we have de-risked the company by implementing a more focused business model, which includes divesting our international consumer businesses with Poland, our last remaining sale expected to close next year. I am particularly pleased that the momentum across our franchise includes the transformation as well. The investments we have made are improving our risk and control environment. Many of our programs are at or near target state, and we are making good progress in the remaining areas. We continue to focus on streamlining processes and platforms and driving automation to reduce manual touch points. We're also increasingly deploying AI tools to support these efforts in areas such as data quality, and we remain on track with our data plan. And as all of this work progresses, we are confident that our transformation expenses will start to decrease next year. But transformation is hardly the only recipient of investment. We continue to make investments that enhance the competitiveness of our businesses. For example, we aim to deliver the benefits of advancements in stablecoin and digital assets to our clients in a safe and sound manner by modernizing our own infrastructure and improving efficiency, transparency, and interoperability for our clients. As a leading global bank in the space, we are laser focused on innovations which enable clients to access real-time 24-7 payments, clearing and settlement across borders and across currencies. Citi Token Services, our leading digital asset solution, is now live in four major markets with more to come and has processed billions of dollars of transactions since its launch. In markets, investments in our trading platforms have allowed us to handle record volumes with ease. In wealth, our partnership with iCapital will provide an end-to-end solution for our alternative investment offerings. As you saw with the American Airlines extension and the refreshed Costco Anywhere Visa card, we're investing in our cards portfolio to deliver more value for our cardholders. And later this quarter, we will introduce a new proprietary premium credit card, Citi Strata Elite, to our rewards family of products to expand our offering for affluent customers. In terms of investing in talent, our momentum and value proposition continue to attract great leaders to the firm, as you've seen recently in banking and wealth. Just as importantly, we are giving our talent the tools and the resources to compete and to win. Now let's turn to the environment. Well, it's proven to be more resilient than most of us anticipated. But we aren't dropping our guard as we begin the second half of the year. We expect to see goods prices to start ticking up over the summer as tariffs take effect. and we have seen pauses in capex and hiring amongst our client base. All of that said, the strength of the US economy, driven by the American entrepreneur and a healthy consumer, has certainly been exceeding expectations of late. As I've been speaking to CEOs, I've yet again been impressed by the adaptability of our private sector, aided by the depth and breadth of the American capital markets. I believe our results over the past year will help you see why we have been so confident in our trajectory. Our people have been performing with excellence in an unpredictable macro environment, and I am so proud of them. The need for what we can uniquely provide for clients remains in very high demand, and we will continue to deliver for them through our one-city approach through the second half of the year and beyond. Our wealth business is now starting to truly benefit from not only our retail bank, but our global network. By aligning client coverage and deploying credit more strategically, we're deepening relationships with asset managers and private market clients across services, markets, banking, and wealth. Importantly, we are gaining share of mind as well as share of wallet. We will remain relentlessly focused on execution. As I've said, next year's 10% to 11% ROTCE target, it's a waypoint. It's not a destination. The actions we have taken have set up Citi to succeed long term, drive returns above that level, and continue to create value for shareholders. With that, I will turn it over to Mark, and then we will be happy to take your questions.